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Tanfield Group PLC (TAN)

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Thursday 03 March, 2022

Tanfield Group PLC

Loan Subscription Update

RNS Number : 5580D
Tanfield Group PLC
03 March 2022
 

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain

 

 

Tanfield Group Plc

("Tanfield" or the "Company")

 

Loan Subscription Update

 

 

The Board of Tanfield (the "Board") is pleased to update the market with respect to additional loans put in place to fund the Company's ongoing legal proceedings in relation to its investment in Snorkel International Holdings LLC ("Snorkel"), the aerial work platform business, and other day to day costs.

 

Investment Background

 

· Tanfield is a 49% shareholder in the equity of Snorkel following the joint venture between the Company and Xtreme Manufacturing LLC ("Xtreme") (the "Contemplated Transaction"), a company owned by Don Ahern of Ahern Rentals Inc, relating to Snorkel, in October 2013.

 

· The Snorkel investment is valued at £19.1m. The outcome of the US and UK Proceedings referenced below could have an impact on this valuation.

 

· On 22 October 2019, the Company announced that it had received a Summons and Complaint, filed in Nevada (the "US Proceedings") by subsidiaries of Xtreme, relating to the Contemplated Transaction.

 

· On 24 October 2019, the Company announced it had become necessary to issue and serve a claim in the English High Court against Ward Hadaway (the "UK Proceedings"), the solicitor acting for the Company at the time of the Contemplated Transaction, in order to fully protect the Company's rights pending the outcome of the US Proceedings.  

 

· On 26 February 2021, Ward Hadaway were granted permission to join Foulston Siefkin LLP ("Foulston Siefkin"), Tanfield's US based law firm who were retained in 2013 to draft the documents governed by US law relating to the Contemplated Transaction, into the UK Proceedings. As a result, the Company amended its claim to include Foulston Siefkin as a second defendant.

 

 

Loan Subscription

 

Further to the update on 3 June 2021, in which the Company announced that the second loan note instrument (the "Second Loan") of up to £1m had subscriptions totalling £950,000, and the update on 30 March 2020, in which the Company announced the first loan note instrument (the "First Loan") of up to £700,000, with £500,000 initially being subscribed to, the Board is pleased to announce that an additional £125,000 of the First Loan has now been subscribed to, taking the total First Loan subscription value to £625,000. The additional First Loan (the "Additional Loan") will be used for providing ongoing funding for the US and UK Proceedings and other day to day costs. 

 

The Additional Loan is unsecured and carries annual interest of 10% which is to accrue and is repayable on the earlier of (i) 28 February 2025 or (ii) receipt of sufficient funds relating to either the US or UK Proceedings.  Should repayment take place prior to 28 February 2025, a 20% early redemption premium shall apply.

 

A number of existing shareholders have subscribed to the Additional Loan of £125,000, which constitutes a related party transaction under Rule 13 of the AIM Rules as a result of OTK Holding A/S and Zoar Invest Aps, which each hold approximately 14% of the issued shares of the Company, subscribing £50,000 each to the Additional Loan.  The Directors of the Company, having consulted with WH Ireland Limited, the Company's nominated adviser, consider the terms of the transaction to be fair and reasonable in so far as shareholders are concerned.

 

Following discussions with the existing shareholders, the Board are of the opinion that further loan funding may be necessary to ensure that the Company can continue to protect its investment in Snorkel.

 

The Board believe that a positive outcome to either or both of the US Proceedings and UK Proceedings is a reasonable expectation, and the Company will continue to vigorously defend and advance its position in both proceedings, whilst continuing to seek advice. 

 

Further updates will be provided to Shareholders as and when appropriate.

 

 

 

For further information:

 

Tanfield Group Plc                                                                                          020 7220 1666

Daryn Robinson   

 

WH Ireland Limited - Nominated Advisor / Broker

James Joyce / Ben Good      020 7220 1666

 

 

 

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